Yes, of course China's smog problems are very real — they lead the world in premature deaths caused by air pollution:

Jefferies

But this massive pollution is actually a sign of rising living standards, they write:

The difference is that industrialization – with its incumbent air pollution – eliminates poverty. Among the top twenty nations with air pollution induced premature deaths are the US, Japan, the UK, Germany and Italy – all wealthy developed nations.

As it turns out, more people die prematurely in India from problems caused by a lacked of advanced infrastructure like diarrhea and poor ventilation or burning of coal and animal dung for heat (which they categorize as "indoor air pollution"):

Jefferies

But a better measure of China's standing on public health is illness, disability and early death (DALY), a metric created by the World Health Organization.

By that criteria, China is not even in the top 20 —

Jefferies

And only a few notches behind Brazil:

Jefferies

Yu and Lu point out that China's air pollution is the fruit of industrialization, and that industrialization is a life saver.

The public health effects of air pollution cannot be viewed in isolation. Nobody believes air pollution is a great thing but nations continue to pollute because civilizations make hard choices. And air pollution is not even that hard a choice. Higher cancer rates in old age are the price that China, and many other nations, have chosen to pay for lower death rates from childhood diarrhea.